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Subsequent Events
12 Months Ended
Dec. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events

Acquisition of Healthspan Research, LLC

 

On March 12, 2017, ChromaDex Corporation acquired all of the outstanding equity interests of Healthspan Research, LLC (“Healthspan”) pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”) by and among (i) Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the “Sellers”) and (ii) ChromaDex Corporation (the “Acquisition”). Pursuant to the Purchase Agreement, ChromaDex purchased all of the outstanding membership interests from the Sellers.

 

Upon the closing of, and as consideration for, the Acquisition, ChromaDex Corporation issued an aggregate of 367,648 unregistered shares of ChromaDex Corporation’s common stock to the Sellers (the “Stock Consideration”) and, in cancellation of a loan owed by Healthspan to Mr. Fried, paid $32,500 to Mr. Fried and will also pay Mr. Fried $100,000 on March 12, 2018. The issuance of the Stock Consideration was not registered under the Securities Act of 1933, as amended (the “Securities Act”), and therefore may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. ChromaDex Corporation is relying on the exemption from federal registration under Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder.

 

Hiring of Robert Fried as President and Chief Strategy Officer

 

Also on March 12, 2017, the Board of Directors (“Board”) of ChromaDex Corporation appointed Robert Fried, a member of the Board since July 2015, as President and Chief Strategy Officer, effective immediately. Mr. Fried will continue to serve as a member of the Board, but resigned as a member of the Nominating and Corporate Governance Committee of the Board.

 

In connection with his appointment as President and Chief Strategy Officer, ChromaDex and Mr. Fried entered into an Executive Employment Agreement (the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Fried is entitled to: (i) an annual base salary of $300,000; (ii) an annual cash bonus equal to (a) 1% of net direct-to-consumer sales of products with nicotinamide riboside as a lead ingredient by ChromaDex plus (b) 2% of direct to consumer net sales of products with nicotinamide riboside as a lead ingredient for the portion of such sales that exceeded prior year sales plus (c) 1% of the gross profit derived from nicotinamide riboside ingredient sales to dietary supplement producers; (iii) an option to purchase up to 500,000 shares of ChromaDex common stock under the ChromaDex Second Amended and Restated 2007 Equity Incentive Plan or any subsequent equity plan (the “Plan”), subject to monthly vesting over a three-year period; and (iv) 166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vesting over a three-year period.

 

Subject to requisite stockholder approval and Mr. Fried’s continuous service through such date, Mr. Fried is also eligible to receive (i) on March 12, 2018, 166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vesting over a two-year period, (ii) on March 12, 2019, 166,666 shares of restricted ChromaDex Corporation common stock that vest in full on the one year anniversary of the grant date and (iii) up to 500,000 shares of fully-vested restricted ChromaDex Corporation common stock that will be granted upon the achievement of certain performance goals.